City mum on $1.5 million in excessive tax breaks granted to commercial properties

Munsey

By Kim Hairston, The Baltimore Sun

The Munsey Building

The Munsey Building (By Kim Hairston, The Baltimore Sun)

Scott Calvert, The Baltimore Sun

Four months ago, the state assessments agency informed Baltimore’s Finance Department that the owner of The Munsey apartment building had been under-billed by $517,930 on city property tax bills going back to 2007, all because of incorrectly calculated tax breaks.

In other words, the city missed out on more than $500,000 in public revenue. Since then there’s been no indication the city has moved to collect that money from the Munsey’s current owner, FCP Capital Partners, which bought the downtown building in 2010.

“We have not received any additional tax bills related to years prior to FCP’s acquisition, nor does FCP believe it has any liability for those years,” company representative Karen Widmayer emailed.

By contrast, the owner of a second apartment building said the city has "slowly" begun to collect unwarranted tax breaks on that property.

The city is mum on the issue, including any plans it may have for the five properties that the state says together received more than $1.5 million in improper tax breaks.Mayoral spokesman Ryan O’Doherty and Deputy Finance Director Henry Raymond have not responded to requests for comment.

The city took an aggressive approach to collections last year, when it involved homeowners getting tax breaks they were not entitled to get. One couple had to cash in retirement savings and borrow from a relative to repay the city. Last December, Raymond put it this way in an interview: “If you’re not entitled to it, we’re seeking recovery. End of discussion.”

The Munsey was among several large commercial properties that The Baltimore Sun found had received excessive tax breaks under a program to encourage historic rehabs. The state assessments agency, which has overseen the calculations for the city, acknowledged crunching the numbers incorrectly. The city failed to catch those mistakes year after year.

Several property owners on the list did not respond to inquiries from The Sun over the past week. But the owner of the Atrium at Market Center apartments on Howard Street said the city has made what appear to be initial attempts to capture its unwarranted windfall, which also exceeds $500,000.

“The city is correcting the underpayments or whatever slowly and are billing us as they go,” David Hillman, who runs Southern Management Corp., wrote in an email. It was not clear how much the city has sought to collect from the Atrium, a former Hecht Co. department store.

Hillman vented his frustration with the city, which he contends has broken promises on the west side redevelopment initiative since Martin O’Malley was mayor, yet has granted generous subsidies for other projects.

“I am just disgusted with the whole damn thing and an extra $500,000+ tax bill on a building that already loses more than that every year is insulting,” Hillman wrote.

O’Doherty and Raymond also did not respond to questions about another type of error that state officials alerted city officials to: More than two dozen properties apparently received the city’s historic tax credit for 11 or 12 years, rather than the legal maximum of 10.